Fleet insurance: What types of insurance are available for this type of insurance?
An individual will need car insurance for protection against material loss and assurance of safety, but do you know that with several cars at your disposal, you are not required to have an individual take-out on insurance? The easiest answer would be fleet insurance.
In case you or your company has various vehicles in your assets, constantly used by different people, it will be possible to contract a single insurance that covers all these vehicles, without having to worry about indicating each one of the drivers.
To better understand how this insurance works and what its peculiarities are, we have separated the most important information here. Check it out!
How does fleet insurance work?
The answer to this question is quite simple: it works just like any other insurance! If any of the protected vehicles is involved in an accident that constitutes a loss, the insured will be compensated according to the coverage contracted .
The difference here is that it is not just one car that is insured individually, but rather an entire fleet. In other words, the contract is one, but it covers more than one vehicle.
Both individuals and legal entities may acquire this kind of insurance. Basically, two cars are enough to be considered as a fleet. However, this must be negotiated directly with the insurance company since some of them require a certain minimum number. Thus, the number of cars needed in order to buy insurance varies for each insurance agency.
This will be the perfect solution for companies, entrepreneurs who have several cars in their name, constantly used by different drivers. One of the obvious advantages is that it’s not necessary to specify each driver, unlike in the individual insurance case.
Dependent on the characteristics of a vehicle group and on the insurance policy stipulated, there may be possibilities of obtaining special advantages in the closing of an agreement with an insurance company. This is an outstanding way of saving money and simultaneously lightening the burden on protection for the vehicles at your disposal.
What is the difference between fleet insurance and individual insurance?
The main difference between the two is the policy. In fleet insurance, a single contract can cover several vehicles. In individual insurance, a different policy is required for each insured vehicle. As mentioned in the previous topic, it is not necessary to specify the drivers in the fleet insurance policy; in individual insurance, it is.
However, it is important to note that fleet insurance depends on specific analyses that will influence both its price and its coverage. These analyses take into account the fleet as a whole, i.e.: the number and category of vehicles, type of activity of the drivers or the company, region of circulation, history of accidents, among other aspects.
Another difference is that a single accident does not increase the price of the policy, as happens with regular insurance. The prices vary according to the actions of all the cars together, and not individually.
What are the types of fleet insurance?
There are two main types: affinity groups and group policies . What differentiates them, in short, is the way in which the premium (insurance value) is paid. Take a look:
Affinity groups
In this case, insurance is contracted by an employer or association formed by employees of the same company.
Although there is only one policy, the insurer must issue individual insurance certificates that will be distributed to all members of the group.
Payment for each insurance policy is made independently, usually by the employees themselves. However, payment may be made in full by the employer (if the insurance policy has been taken out by the employer) or divided between the employer and employees in proportions established by mutual agreement.
Depending on the insurer’s criteria, dependents of members may or may not be included in the policy. The employer may include their own cars in the insurance policy.
Group policies
Unlike the previous case, here the policy is issued to a single person, whether legal or natural, since the entire fleet of cars is in their name. This means that the charge is unique, without the need to issue individual certificates.
If the insurance contract is made by a legal entity, it is also possible to include the vehicles of directors and subsidiary or associated companies, as long as they are legally recognized.
In case of purchase of new vehicles during the course of the policy, such vehicles may be added to the insurance upon payment of the due premium.
How does compensation for fleet insurance work?
Generally, fleet insurance coverage ensures the same protection as individual insurance, depending on the contents of the policy. The kind of coverage mostly covered includes collision, theft, robbery, explosion, and fire damages. One can get further coverage, which in most instances perfectly suits the needs of those who use their car for work. Some examples are:
- extra car : the insurance guarantees the availability of an extra vehicle while the main one is being repaired;
- loss of earnings : the insured may receive daily payments for days not worked while the vehicle is unavailable;
- extraordinary expenses : in cases of full compensation, reimbursement of other expenses that may arise as a result of the accident is guaranteed;
- Accessories : Coverage covers stolen or damaged accessories in the vehicle, such as stereos and GPS.
As with individual insurance, the loss may be total or partial. If the repairs to the vehicle cost more than 75% of its value, it will be total. Otherwise, it will be partial.
Compensation follows the same logic: in partial claims, only the repair cost will be compensated, with the insured party having to pay the deductible. In full claims, however, compensation will be total, meaning the insured party will receive the market value of the vehicle or the value determined in the policy, depending on what was contracted.
In case of theft or robbery, full claim will be payable only if the vehicle is not traced. One should remember that the deductible amount need not be spent to obtain full compensation.
The compensation value is evaluated separately for each car that the insured has. Claims are evaluated on an individual basis, even while there is only one policy.